Citigroup Shareholders Reject Executive Pay Plan

Citigroup shareholders voted to reject the company's executive compensation plan during an annual stockholders meeting in Dallas on Tuesday after critics complained that top officials including CEO Vikram Pandit collect rewards all too easily.

Citigroup is only the third company this year to have a failed vote from shareholders about executive compensation, according to Ted Allen, spokesman for ISS Proxy Advisory Services. Actuant Corp., an industrial manufacturer and distributor, and International Game Technology, a gaming machines company, were the other two.

Most companies with publicly traded stock had to hold "say-on-pay" votes in 2011 according to the Dodd-Frank financial regulatory reform law. The U.S. Securities and Exchange Commission exempted smaller companies with less than $75 million in publicly traded stock from holding these votes until 2013.

Only 41 out of the 3,000 companies in the Russell 3000 Index had failed "say-on-pay" votes last year, Allen said.

"It is unusual for a big firm to lose a vote and it has been very unusual for a financial service firm to lose," Brian Foley, pay consultant and managing director of Brian Foley & Co. in White Plains, N.Y. said. "This wasn't a near miss."

Foley called the vote a "very interesting indication of unhappiness" among shareholders.

He said it was significant that Citigroup had a failed pay proposal the third year in which it held a say-on-pay vote.

"When you stumble the first time out of gate it's one thing," he said. "When you stumble the third time out of gate, it's very interesting."

Citigroup's CEO Pandit, 55, had $15 million in compensation for 2011, which included a base salary of $1.7 million, a cash bonus of $5.3 million, almost $4 million in deferred stock and another near $4 million in deferred cash.

A spokeswoman for Citigroup said, "Citi's Board of Directors takes the shareholder vote seriously, and along with senior management will consult with representative shareholders to understand their concerns."

The spokeswoman said the Personnel and Compensation Committee of the Board "will carefully consider their input as we move forward."